Iraq has made a final payment of $44 million to Kuwait, thus completing the full payment of $52.4 billion as part of its compensation for its invasion of the Gulf state in 1990.
The payments were ordered by the United Nations Security Council (UNSC) which set up a Compensation Commission for individuals, companies, and governments to submit their claims for loss during the war.
The UN Office in Geneva said: “With the final payment of compensation made on January 13, 2022, all compensation awarded by the Commission has now been paid in full. Funds to pay compensation were drawn from the United Nations Compensation Fund which received a percentage of the proceeds generated by the export sales of Iraqi petroleum and petroleum products. This percentage was originally set at 30 per cent and was reduced over the years under various Security Council resolutions and Governing Council decisions.”
The UNSC thanked the Government of Iraq for its cooperation with the Commission and its commitment to meeting its obligations, even in the face of extraordinary security and economic challenges.
Meanwhile, the Iraqi Finance Ministry said: “It is hoped that ending the payment of compensation will contribute to removing Iraq from Chapter VII (Action with Respect to Threats to the Peace, Breaches of the Peace, and Acts of Aggression), as well as its impact on re-integrating the Iraqi banking system with the global banking system and benefiting from the financial abundance that will be achieved.”
The Gulf War (August 2, 1990 – February 28, 1991) was waged by coalition forces from 35 nations led by the United States against Iraq in response to Iraq’s invasion and annexation of Kuwait arising from oil pricing and production disputes.
On August 2, 1990, the Iraqi Army invaded and occupied Kuwait. Different speculations have been made regarding the true intents behind the invasion, including Iraq’s inability to pay Kuwait more than US$14 billion that it had borrowed from Kuwait to finance the Iran–Iraq War, and Kuwait’s surge in petroleum production levels which kept revenues down for Iraq.
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Iraq interpreted Kuwait’s refusal to decrease its oil production as an act of aggression.
Most of the coalition’s military forces were from the U.S., with Saudi Arabia, the United Kingdom and Egypt as leading contributors. Kuwait and Saudi Arabia paid around US$32 billion of the US$60 billion cost.